Document:

EXHIBIT
10.37

FIRST AMENDED LEGAL SERVICES FEE
AGREEMENT

This First Amended
Legal Services Fee Agreement (“First Amended Agreement”) is made and entered
into as of the  1st day of September, 2006 (the “Effective Date”),
by and between Forgent Networks, Inc., a Delaware corporation (the “Client”)
and Hagans, Burdine, Montgomery, Rustay & Winchester, P.C. (“HBMRW”)
(formerly Hagans, Bobb & Burdine, P.C.) and Bracewell & Giuliani,
L.L.P. (“B&G”). HBWRW and B&G shall be each individually referred to as
a “Law Firm,” shall be collectively referred to as the “Law Firms”).  The Law Firms and the Client are sometimes
collectively referred to as the “Parties.” 
Any one of the Parties may be sometimes hereinafter referred to as a “Party.”

RECITALS

A.  Client and Law Firms have previously entered
into that certain Legal Services Fee Agreement as of April 14, 2006 concerning
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”).

B.
 Client and Law Firms now desire to
replace the Legal Services Fee Agreement with this First Amended
Agreement.  Client is executing this
First Amended Agreement for the purpose of continuing Client’s representation
by the Law Firms in connection with (i) investigating and asserting claims,
including the filing and prosecution of lawsuits, against any other person or
entity that may be infringing the Patents (any such claim as to which
litigation has been or is hereafter 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 has not engaged and is not
engaging the Law Firms to market or commercialize its technologies to
non-infringers, or to handle any patent prosecution or re-examination
concerning any of the Patents or any other patents.  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 First
Amended 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:

CERTAIN
DEFINITIONS

For purposes of
this First Amended Agreement, the following terms shall have the meaning given
to such terms below (in addition to other terms defined in other parts of this
First Amended Agreement):

“Actual Patent
Proceeds” shall mean, in the case of a Qualified Sale that is structured as an
asset sale,  the Net Proceeds received by
Client as payment for the Patent-Related Assets sold by Client as part of such
Qualified Sale.

“Allocated Patent
Proceeds” shall mean, in the case of a Qualified Sale that is structured other
than as an asset sale (i.e., as a sale of the stock of Client, as a merger or
consolidation of Client, or otherwise) that portion of the Net Proceeds
received by Seller(s) in such Qualified Sale that is equal to the Designated
Value of the Patent-Related Assets sold or otherwise transferred as part of
such Qualified Sale.

“Closing
Date” shall mean the effective date of the closing of a Qualified Sale.

“Designated
Value”  shall mean the dollar value of
the Patent-Related Assets as determined by the parties in accordance with
Section 3(d) hereof.

“Gross
Proceeds” shall mean 100% of the consideration received by the Seller(s) in a
Qualified Sale, which consideration shall consist of (i) the total cash
consideration received by the Seller(s) on the Closing Date, plus (ii)

 

the present value
(reflecting a present value discount as reasonably determined by Client and Law
Firms), as of the Closing Date, of any cash installment payments to be received
by the Seller(s) after the Closing Date, plus (iii) the fair market
value (as reasonably determined by Client and Law Firms), as of the Closing
Date, of any non-cash consideration received by Seller(s) on the Closing Date
or to be received by Seller(s) after the Closing Date.

“Net
Proceeds” shall mean Gross Proceeds minus all Transaction Costs.

“Patent-Related
Assets” shall mean, collectively,  the
Patents and/or any rights pertaining thereto that are sold or transferred  as part of a Qualified Sale.

“Qualified
Sale” shall mean a sale or transfer to one or more of the defendants in a
Lawsuit (or to any designee of one or more of the defendants in a Lawsuit) of
all or substantially all of the Patents and/or any rights pertaining thereto
(whether through a sale of assets or through a sale, merger or consolidation of
Client) which occurs or is initiated within 12 months of (i) the abandonment or
termination of a Lawsuit by Client against the advice of Law Firms, or (ii) the
termination of this First Amended Agreement by Client without good cause.

“Qualified
Sale Proceeds” shall mean either the Actual Patent Proceeds or the Allocated
Patent Proceeds, as the case may be, 
received by the Seller(s) in a Qualified Sale.

“Seller(s)”
shall mean (i) the stockholders of Client, in the event the Qualified Sale is
structured as a stock sale, merger or consolidation,  or (ii) Client, together with its affiliates
and designees, in the event the Qualified Sale is structured as an asset sale.

“Transaction Costs”
shall mean all third party costs incurred by Seller(s) in connection with and
in furtherance of a Qualified Sale, including attorneys’ fees, accounting fees,
brokers’ fees, and other professional fees and expenses.

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 Firms.

(a)                                  For services rendered pursuant hereto, the
Client hereby agrees to pay the Law Firms a contingent fee equal to 37.5% (20%
to HBMRW and 17.5% to B&G) of all License Proceeds, Litigation Proceeds and
Qualified Sale 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 April 14, 2006, 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.

(b)                                 The Law Firms will receive their respective
percentage interest in the License Proceeds, Litigation Proceeds and Qualified
Sale 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, Litigation Proceeds
and Qualified Sale Proceeds shall collectively be referred to herein as the “Contingent
Attorneys’ Fees.”

(c)                                  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, Litigation Proceeds and Qualified
Sale 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.

(d)                                 In the event that a Qualified Sale is
structured other than as an asset sale (i.e., as a sale of the stock of Client,
as a merger or consolidation of Client, or otherwise), Client and the Law Firms
shall determine the Designated Value of the Patent-Related Assets sold or
otherwise transferred as part of such Qualified Sale as follows:  Promptly following the closing of the
Qualified Sale, Client and the Law Firms shall attempt to mutually agree upon  the value, as of the Closing Date, of the
Patent-Related Assets sold or otherwise transferred as part of the Qualified
Sale (the “Designated Value”).  If Client
and the Law Firms are unable to agree upon the Designated Value within 30 days
following the closing of the Qualified Sale, Client and the Law Firms shall
each select one independent appraiser with at least ten (10) years experience
in business evaluation.  The two
appraisers so selected shall in turn select a third independent appraiser with
at least ten (10) years experience in business evaluation, and the three
appraisers shall then determine the Designated Value using such valuation
methodologies, protocols and procedures as they deem appropriate.  The determination of the Designated Value by
the three appraisers shall be binding on Client and the Law Firms and shall not
be subject to challenge or appeal, 
absent fraud, willful misconduct and/or gross negligence by one or more
of the three appraisers.  Client and the
Law Firms shall each bear 100% of the fees and 
the expenses of the appraiser they select, and 50% of the fees and
expenses of the third appraiser.

4.                                      Related Expenses.

(a)                                  Payment of Related Expenses. 
During the term hereof, Related Expenses shall be paid as follows:

(1) Client shall be liable for and shall pay all
Related Expenses incurred prior to September 1, 2006;

(2) Subject to the provisions of sub-paragraph (4) of
this sentence, Client shall be liable for and shall pay 25% of all Related
Expenses incurred on and after September 1, 2006;

(3) Subject to the provisions of sub-paragraph (4) of
this sentence,  HBMRW shall be liable for
and shall pay 50% of all Related Expenses incurred on and after September 1,
2006 up to a maximum of $1,250,000 and B&G shall be liable for and shall
pay 25% of all Related Expenses incurred on and after September 1, 2006 up to a
maximum of $625,000; and

(4) Once the total amount of Related Expenses incurred
after September 1, 2006 equals $2,500,000 (such that Client’s share of such
Related Expenses is $625,000, HBMRW’s share is $1,250,000, and B&G’s share
is $625,000), the Client shall be liable for and shall pay all Related Expenses
incurred on and after September 1, 2006 in excess of $2,500,000.

 

For purposes hereof, “Related Expenses” shall mean any
reasonable expenses incurred by 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, and on-line
computer research.  Related Expenses
shall not include any expenses related to any patent prosecution or
re-examination concerning any of the Patents or any other patents. The Parties
will advise each other in advance of incurring Related Expenses that will
exceed $5,000.  Notwithstanding the
foregoing, Related Expenses shall be reimbursed to the Parties out of any
License Proceeds, Litigation Proceeds or Qualified Sale Proceeds up to, but not
to exceed, 20% of any such License Proceeds, Litigation Proceeds or Qualified
Sale Proceeds recovered from any person(s) at any one time in the ratio that each
has paid as of the time the reimbursement is made.  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
Parties in the ratio that each Party has paid as of the time the reimbursement
is made 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 Client in accordance with the provisions of Paragraph 3(a)
above.  Any expenses incurred by The Roth
Law Firm, P.C. that are reimbursed by Client pursuant to that certain Legal
Services Fee Agreement between Client and The Roth Law Firm, P.C. shall be
considered “Related Expenses” of Client for purposes of this First Amended
Agreement.

(b)                               Monthly
Reconciliation of Related Expenses. 
Promptly after the end of each month, the Parties will advise each other
of the amount of Related Expenses they have incurred or paid during such month.  Promptly after receiving such information
from B&G and Client, HBMRW will calculate the amount due from each Party
pursuant to this First Amended Agreement and shall invoice Client and B&G
accordingly.  Client and B&G shall
pay such invoice within 30 days of receipt.

Example

Assume:

 

·                  $1,000,000 in
Litigation Proceeds is received from Defendant A on 12/1/06.

·                  Client has
incurred $250,000 in Related Expenses prior to 9/1/06 and $100,000 in Related
Expenses after 9/1/06.

·                  HBMRW has
incurred $200,000 in Related Expenses after 9/1/06

·                  B&G
has incurred $100,000 in Related Expenses after 9/1/06

Result:

 

·                  $200,000
is applied to reimbursement of Related Expenses, as follows:

Total Related Expenses as
of 12/1/06 = $650,000

Client reimbursement is
$350,000/$650,000 x $200,000 = $107,692.31

HBMRW reimbursement is
$200,000/$650,000 x $200,000 = $61,538.46

B&G reimbursement is $100,000/$650,000 x $200,000
= 30,769.23

·                  $800,000
is distributed as follows:

Client - $420,000 (52.5%)

HBMRW - $160,000 (20%)

B&G - $140,000
(17.5%)

The Roth Law Firm, P.C. - $80,000 (10%)

5.                                      Client’s
Retention of Independent Legal Counsel  Client acknowledges that
Client requested the Law Firms to pay a percentage of Related Expenses incurred
on and after September 1, 2006, and that the Parties thereafter agreed to
increase the percentage of contingent fees payable to Law Firms under Paragraph
3(a) and to the other provisions of this First Amended Agreement.  Client represents to Law Firms that, prior to
entering into this First Amended Agreement, Client sought and obtained advice
of independent counsel.

 

6.                                      Court
Award of Attorneys Fees or Costs.  Where reasonably appropriate under the
circumstances in any Lawsuit, the Law Firms may 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 First Amended
Agreement.

7.                                      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.

8.                                      Lead
Counsel; Law Firm Association of other Lawyers.  Client and Law Firms agree
that HBMRW shall continue to be lead counsel in connection with any
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 a
Lawsuit is pending (such Other Counsel being “Local Counsel” for purposes
hereof), Client shall bear all related Local Counsel fees and expenses 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 and expenses by Client, increase the cost to
Client of any Lawsuits or reduce the interest of the Client in the License
Proceeds, Litigation Proceeds or Qualified Sale 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 Other Counsel.

9.                                      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.

10.                               Termination
of Engagement.

(a)                                  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.

(b)                                 By the Client. 
The Client may at any time, with or without cause, terminate the Law
Firms’ representation of the Client hereunder by providing not less than 90 days’
prior written notice to the Law Firms.

(c)                                  Effect of Termination. 
Upon the effective date of the termination of the Law Firms’
representation of the Client under Paragraph 10(a) or 10(b) above (the “Termination
Date”), this First Amended 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 follows:

 

(1)          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.

(2)          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 billings 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 billings”) rather
than billing the Client in accordance with Paragraph 3 above) relative to such
Lawsuit or License Negotiation during the period beginning on April 14, 2006
and ending on the Termination Date, and the denominator of which is equal to
the total billings by all law firms (including the assumed billings 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 billings of the Law Firms that comprise the numerator, and the total
billings of the additional law firms that comprise part of the denominator,
must be reasonable as to both time and billing rates.

(3)          With
respect to any Related Expenses paid by Law Firms pursuant to this First
Amended Agreement that have not been reimbursed to Law Firms as of the
Termination Date (“Unreimbursed Related Expenses”), Client shall pay to Law
Firms all Unreimbursed Related Expenses within thirty (30) days after the
Termination Date.

(4)          With
respect to any Qualified Sale Proceeds received by Client after the Termination
Date, notwithstanding anything in this First Amended Agreement to the contrary,
Client shall pay to Law Firms 37.5% of such Qualified Sale Proceeds within
thirty (30) days after such Qualified Sale Proceeds are received by Client or,
at the election of the Client, Client may pay to Law Firms within thirty (30)
days after the inception of Client’s right to receive Qualified Sale Proceeds,
the present value of the amount of money that is to be paid to the Client over
time.

11.                               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.

12.                               Law
Firm Authority to Act for Client.  Subject to the Client’s right to
pre-approve Related Expenses in accordance with Paragraph 4 above and the other
provisions of this First Amended Agreement, 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.

13.                             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.

14.                               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 First Amended Agreement.

 

15.                               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 First Amended
Agreement will be promptly scheduled as an asset by the bankrupt 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 First Amended 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.), the bankrupt Client agrees
that Law Firms shall be fully reimbursed by Client, or reimbursed out of the
bankrupt Client’s share of Litigation Proceeds, License Proceeds and Qualified
Sale Proceeds, for the time spent and costs incurred for these extra services.
Client expressly consents to the retention by such 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.

16.                               Remedies
for Breach.  In the event that any Party hereto
shall breach any of the obligations imposed by this First Amended 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 16, if the
Client breaches the First Amended 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.”

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

18.                               Governing
Law.  It is expressly understood and agreed
that this First Amended 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.

19.                               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 or Qualified Sale
Proceeds received by Client or any revenues or other benefits received by
Client from License Negotiations or any other source.

20.                               Legal
Construction.  In case any one or more of the
provisions contained in this First Amended 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 First Amended Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.

21.                               Waiver
and Integration Clause.  This First Amended Agreement
constitutes the entire agreement among the Parties and supersedes any prior
understandings or written or oral agreements between the Parties respecting the
subject matter of this First Amended Agreement, including, without limitation,
that certain Legal Services Fee Agreement entered into among the Parties as of
April 14, 2006.  This First Amended
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
First Amended 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.

	
  FORGENT NETWORKS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ RICHARD N. SNYDER

  	
   

  
	
   

  	
   

  	
  Richard N.
  Snyder

  
	
   

  	
   

  	
  Chief Executive
  Officer

  
	
  Date:

  	
   

  	
  11/29/06

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HAGANS, BURDINE,
  MONTGOMERY,

  
	
  RUSTAY &
  WINCHESTER, P.C.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ FRED HAGANS

  	
   

  
	
   

  	
   

  	
  Fred Hagans

  
	
   

  	
   

  	
  Shareholder

  
	
  Date:

  	
   

  	
  11/29/06

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BRACEWELL &
  GIULIANI, L.L.P.

  
	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ RALPH MCBRIDE

  	
   

  
	
   

  	
   

  	
  Ralph McBride

  
	
   

  	
   

  	
  Partner

  
	
  Date:

  	
   

  	
  12/1/06EXHIBIT
10.38

FORGENT
NETWORKS, INC.

INCENTIVE
BONUS PLAN

ARTICLE
I

PURPOSE

 

The purpose of the Forgent Networks, Inc. Incentive
Bonus Plan (the “Plan”) is to provide specified benefits to a select group of
Employees and Consultants who contribute materially to the implementation,
execution and success of the Company’s Patent Licensing and Enforcement
Program.  The Plan is intended to be a “bonus
program” within the meaning of Labor Reg. § 2510.3-2(c) and, therefore, is not
intended to be subject to the requirements of the Employee Retirement Income
Security Act of 1974, as amended.

ARTICLE
II

DEFINITIONS

For the purposes of the Plan, the following terms
shall have the following meanings unless the context clearly indicates
otherwise:

2.01         “Award”
shall mean the amount a Participant is awarded by the Committee under the Plan
for a particular Performance Cycle.

2.02         “Beneficiary”
shall mean the Participant’s legal beneficiary.

2.03         “Bonus
Pool” shall mean, with respect to a Performance Cycle,  the total dollar amount set aside by the
Company and reserved for distribution to the Participants under the Plan with
respect to such Performance Cycle, being the amount equal to one percent (1%)
of the Company’s Gross Patent Program Revenues for such Performance Cycle multiplied
by the Designated Acceleration Factor for the Performance Cycle.

2.04         “Committee”
shall mean the committee established by the Company that is responsible for
administering the Plan.  

2.05         “Company”
shall mean the Forgent Networks, Inc. and its successors and assigns.

2.06         “Consultant”
shall mean any third party consultant engaged by the Company, whether on a full
time or part time basis, to assist the Company with the Company’s Patent
Licensing and Enforcement Program.

2.07         “Designated
Acceleration Factor” shall mean with respect to each Performance Cycle, the
following multiple:

	
  Performance Cycle

  	
   

  	
  Designated Acceleration Factor

  	
   

  
	
  1st

  	
   

  	
  2.0

  	
   

  
	
  2nd

  	
   

  	
  1.5

  	
   

  
	
  3rd

  	
   

  	
  1.0

  	
   

  

; unless such
multiples are otherwise amended or modified by the Committee in accordance
herewith.

2.08         “Disability” shall mean permanent and
total inability to engage in any substantial gainful activity, even with
reasonable accommodation, by reason of any medically determinable physical or
mental impairment which has lasted or can be reasonably be expected to last
without material interruption for a period of not less than twelve (12) months,
as determined in the sole discretion of the Committee.

2.09         “Effective
Date” shall mean, for purposes of this Plan, January 1, 2006, the effective
date of the Plan.

 

2.10         “Employee” shall mean any person who is
employed by the Company, whether on a full time or part time basis, to assist
the Company with the Company’s Patent Licensing and Enforcement Program.

2.11         “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.

2.12         “Fiscal
Year” shall mean that period which begins each January 1 and ends each
following December 31.

2.13         “Gross Patent Program
Revenues”  shall mean the total revenues
collected by the Company from the Patent Licensing and Enforcement Program
during a particular Performance Cycle. 

2.14         “Participant”
shall mean any Employee or Consultant who is selected to participate in the
Plan by the Committee, as provided under Article III of the Plan.

2.15         “Patent
Licensing and Enforcement Program” shall mean the Company’s ongoing general
efforts to secure license agreements with, and otherwise pursue remedial
actions against and obtain recoveries from, various third parties who, in the
Company’s judgment, have historically infringed and/or are currently infringing
one or more of the Company’s patents.

2.16         “Performance
Cycle” shall mean each full calendar year during the term hereof, beginning on
January 1 and ending on December 31, except where the Termination Date occurs
other than  on (or effective as of) the
close of business on December 31,  in
which case, as to the final Performance Cycle only, the Performance Cycle shall
be that period of time beginning on January 1 immediately preceding the
Termination Date and ending on the Termination Date.  

2.17         “Plan”
shall mean the Company’s Incentive Bonus Plan, as set forth herein.

2.18         “Plan
Administrator” shall mean that individual appointed by the Committee to assist
the Committee with the administration of the Plan.

2.19         “Retires”
shall mean the termination by an Employee of his employment with the Company
after he attains the age of  65 years of
age.

2.20         “Termination
Date” shall mean the effective date of the termination of the Plan. 

2.21         “Termination
of Employment” shall mean a Participant’s separation from service with the
Company, voluntarily or involuntarily, for any reason other than because the
Participant Retires, suffers a Disability or dies.

ARTICLE
III

PERFORMANCE CYCLES

Unless this Plan is
earlier terminated by the Committee in accordance herewith, the first
Performance Cycle will begin on the Effective Date and will end on December 31,
2006; the second Performance Cycle will begin on January 1, 2007, and will end
on December 31, 2007; and the third and final Performance Cycle will begin on
January 1, 2008 and will end on December 31, 2008. 

ARTICLE
IV

ELIGIBILITY AND PARTICIPATION

4.01         Eligibility and Selection.  Any Employee or Consultant is eligible to
participate in the Plan, subject to being selected for participation by the
Committee.   At such time and from time
to time as appropriate, whether before the commencement of or during a
particular Performance Cycle, the Committee shall designate the

 

Employee(s)
and/or Consultant(s) who will be Participants in the Plan for that Performance
Cycle.  An Employee’s or Consultant’s
selection for participation in the Plan for a particular Performance Cycle
shall be based on the current responsibilities and contributions to the Company’s
Patent Licensing and Enforcement Program of the Employee or Consultant as
determined by the Committee in its sole discretion.  The Committee may identify and designate at
any time and from time to time to a new Participant during a Performance
Cycle.  

4.02         Limits of
Participation.  An Employee’s or
Consultant’s selection by the Committee as a Participant for one Performance
Cycle does not guarantee that such Employee or Consultant will be selected as a
Participant for any future Performance Cycle. 

4.03         Condition of
Participation.  The Committee may
adopt one or more additional conditions for eligibility and/or participation,
or modify its existing conditions for eligibility and participation, from time
to time as it deems appropriate in its sole discretion.

ARTICLE
V

DETERMINATION OF AWARDS

 

5.01         Determination
of Awards.  As soon as
administratively practicable following the end of a Performance Cycle, the
Committee shall determine the amount of the Gross Patent Program Revenues for
the Performance Cycle just completed. 
Then, the Committee shall multiply one percent (1%) of that amount by
the Designated Acceleration Factor for that Performance Cycle to determine the
aggregate amount of the Bonus Pool for that Performance Cycle.  Finally, the Committee shall then determine
the amounts of the individual Awards to be awarded to each of the Participants
for that Performance Cycle.  The amounts
of the individual Awards shall be determined by the Committee in its sole
discretion based on the Committee’s evaluation of the relative efforts and
contributions of the respective Participants to the Patent Licensing and
Enforcement Program during that Performance Cycle.  The total amount of all Awards awarded to the
Participants for a Performance Cycle will equal the aggregate amount of the
Bonus Pool for that Performance Cycle.

5.02         Termination of
Employment During Performance Cycle. 
If a Participant experiences a Termination of Employment during a
Performance Cycle, such Participant’s rights under the Plan shall terminate.  The effective date of the Participant’s
Termination of Employment shall be the close of business on the date of such
Termination of Employment.  The
Participant shall not be entitled to the payment of any Award for the
Performance Cycle in which the Participant’s Termination of Employment occurs;
however,  the Committee may in its sole
discretion  elect to grant such
Participant an Award on a pro-rated basis or otherwise.

5.03         Participation
After the Beginning of a Performance Cycle. If an Employee first becomes a
Participant in the Plan after a Performance Cycle has begun, then the
Participant shall be eligible to receive an Award for the Performance Cycle in
which the Employee became a Participant as determined by the Committee in its
sole discretion.  

5.04         Retirement
Disability or Death During a Performance Cycle.  If a Participant Retires, experiences a
Disability or dies during a Performance Cycle, then the Participant shall be
eligible to receive a pro-rated Award for the Performance Cycle in which the
Participant Retires, experiences a Disability or dies.  The amount of any pro-rated Award shall be
determined by the Committee in its sole discretion.

ARTICLE
VI

DISTRIBUTION OF AWARDS

6.01         Timing of Payment.  Any Award payable to a Participant or a Participant’s
Beneficiary, as applicable, shall be distributed as soon as administratively
practicable following the end of the applicable Performance Cycle.  Notwithstanding the foregoing, in no event
will the distribution of an Award for a Performance Cycle occur more than 2 1⁄2
months following the end of the applicable Performance Cycle.

6.02         Taxes.  Payments under the Plan are ordinary income
to the Participants.  The Company may
withhold or cause to be withheld from payments made to the Participant pursuant
to Article VI any withholding or other taxes required to be withheld or paid
with respect to the payment and in such amounts as the Company

 

determines
is necessary to cover the taxes or withholding associated with the payment.

6.03         Obligations to the
Company.  If a Participant becomes
entitled to a distribution of benefits under the Plan, and if at such time the
Participant has outstanding any debt, obligation, or other liability
representing an amount owed to the Company, then the Company may offset such
amounts owed by the Participant against the amount of benefits otherwise
distributable to the Participant.

ARTICLE
VII

TERM AND TERMINATION

7.01         Term.  This Plan shall have an initial term of three
(3) years, beginning on the Effective Date and expiring on December 31,
2008.  The term of this Plan may be
extended by the Company in its sole discretion from time to time on such terms
as the Company shall determine.

7.02         Termination.  This Plan may be terminated by the Committee
at any time in its sole discretion.  In
the event that this Plan is terminated during a Performance Cycle, the
Committee shall grant Awards to the Participants for such Performance Cycle in
accordance herewith based on the total amount of Gross Patent Program
Revenues  through the Termination Date. 

ARTICLE
VIII

ADMINISTRATION

8.01         Committee.  The Committee shall have the authority to
make and amend all appropriate rules and regulations for the administration of
the Plan.  Any action with respect to the
administration of the Plan may be taken by the Committee pursuant to a meeting
of the Committee duly called and held for purposes of taking any such action,
or may be taken by unanimous written consent of all members of the
Committee.  When performing its duties
hereunder, the Committee shall be entitled to rely on information furnished by
a Participant, the Company, or any other individual or entity that the
Committee deems appropriate.

8.02         Plan Administrator.  A Plan Administrator may be appointed by the
Committee to be responsible for the day-to-day administration of the Plan.  The Plan Administrator’s responsibilities
will be established by the Committee, but may include: (i) enforcing all
appropriate rules and regulations for the administration of the Plan, (ii)
deciding or resolving any and all questions involving claims under the Plan,
(iii) calculating benefits under the Plan, (iv) calculating any necessary
withholding amounts from benefit payments to Participants and Beneficiaries
hereunder.  When performing its duties
hereunder, the Plan Administrator shall be entitled to rely on information
furnished by a Participant or the Company.

8.03         Agents.  In the administration of the Plan, the
Committee or the Plan Administrator may from time to time employ agents of the
Plan including actuaries, accountants, lawyers or third party administrators,
and delegate duties to them to administer the Plan including acting through a
duly appointed representative. 

8.04         Binding Effect of
Decisions.  The decision or action of
the Committee, or the Plan Administrator with respect to any question arising
out of or in connection with the administration and application of the Plan and
the rules and regulations promulgated hereunder shall be final and conclusive
and binding upon all persons having any interest in the Plan.

8.05         Indemnity of
Committee and Plan Administrator. 
The Company shall indemnify and hold harmless the members of the
Committee, Plan Administrator, and any Employee to whom any duties are
delegated under Article VIII of the Plan against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to the Plan, except in the case of willful misconduct by the Committee,
Plan Administrator, and Employee to whom any duties are delegated under Article
VIII of the Plan.

8.06         Information.  To enable the Committee and Plan
Administrator to perform its functions, the Company shall supply full and
timely information to the Committee and Plan Administrator, as the case may be,
on (i) all matters relating to the operations and performance of the Company’s
Patent Licensing and Enforcement Program during each Performance Cycle, (ii)
the Termination of Employment, death, retirement or Disability of any

 

Participants
during each Performance Cycle, and (iii) any and all other matters as the
Committee or Plan Administrator may reasonably request.

ARTICLE
IX

MISCELLANEOUS

9.01         Amendments.  This Plan may be amended by the Committee
from time to time in its sole discretion, however,  no amendment during a Performance Cycle, may
reduce or otherwise adversely affect any Award to which a Participant would
have been entitled, without the Participant’s consent.

9.02         Unsecured General
Creditor.  Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal or equitable
rights, interests or claims in any property or assets of the Company.  For purposes of the payment of benefits under
the Plan, a Participant shall have no more rights than those of a general
creditor of the Company.  The Company’s
obligation under the Plan shall be that of an unfunded and unsecured promise to
pay money in the future.

9.03         Liability.  The Company’s 
liability for the payment of benefits shall be defined only by the
Plan.  The Company shall have no
obligation to a Participant under the Plan except as expressly provided in the
Plan.

9.04         Cessation of
Obligation.  Upon payment to the
Participant of all amounts due under the Plan, all responsibilities and
obligations of the Company shall be fulfilled and the Participant shall have no
further claims against the Company for further performance.

9.05         Nonassignability.  Neither a Participant nor any other person
shall have any right to assign the amounts, if any, payable hereunder.  No part of the amounts payable shall, prior
to actual payment, be subject to seizure or attachment for the payment of any
debts, judgments or other obligations of a Participant.

9.06         Not a Contract of
Employment.  The terms and conditions
of the Plan shall not be deemed to constitute a contract of employment between
the Company and the Participant.  Such
employment is hereby acknowledged to be, to the extent applicable, an “at will”
employment relationship that can be terminated at any time for any reason, or
no reason, with or without cause, and with or without notice, unless expressly
provided in a written employment agreement. 
Nothing in the Plan shall be deemed to give a Participant the right to
be retained in the service of the Company or to interfere with the right of the
Company to discipline or discharge the Participant at any time.

9.07         Furnishing
Information.  A Participant or his
Beneficiary will cooperate with the Committee by furnishing any and all
information requested by the Committee and take such other actions as may be
requested in order to facilitate the administration of the Plan and the
payments of benefits hereunder, including but not limited to taking such
physical examinations as the Committee may deem necessary.

9.08         Interpretation.  Except when otherwise indicated by the
context, any reference to the masculine gender shall also include the feminine
gender and the neutral, or vice versa, and the definition of any term in the
singular shall also include the plural, or vice versa.

9.09         Governing Law.  The provisions of the Plan shall be construed
and interpreted according to the laws of the of the State of Texas.  

9.10         Notice.  Any notice or filing required or permitted to
be given to the Committee under the Plan shall sent to the address below:

	
  Incentive Bonus Plan
  Committee

  
	
  c/o Plan
  Administrator

  
	
  Forgent
  Networks, Inc.

  
	
  108 Wild Basin
  Drive

  
	
  Austin, TX 78746

  

 

Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date

 

shown on the postmark on the receipt for registration
or certification.

Any notice or filing
required or permitted to be given to a Participant under the Plan shall be
sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Participant.

9.11         Successors.  The provisions of the Plan shall bind and
inure to the benefit of the Company and its successors and assigns and the
Participant and the Participant’s legal Beneficiaries.

9.12         Severability.  In case any provision of the Plan is deemed
to be prohibited by law, determined to be subject to ERISA, or creates any
obligation or liability for the Company beyond its agreement to pay the
compensation under the terms and conditions of the Plan, then such provision or
provisions shall be rendered ineffective without invalidating the remaining
provisions.

9.13         Incompetent.  If the Committee determines in its discretion
that a benefit under the Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of that person’s
property, the Committee may direct payment of such benefit to the guardian,
legal representative or person having the care and custody of such minor,
incompetent or incapable person.  The
Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit.  Any payment of a benefit shall
be a payment for the account of the Participant and the Participant’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Plan for such payment amount.

9.14         Court Order.  The Committee is authorized to comply with
any court order in any action in which the Plan, Committee has been named as a
party, including any action involving a determination of the rights or
interests in a Participant’s benefits under the Plan.

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