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<SEC-DOCUMENT>0001072613-05-001944.txt : 20050809
<SEC-HEADER>0001072613-05-001944.hdr.sgml : 20050809
<ACCEPTANCE-DATETIME>20050809164607
ACCESSION NUMBER:		0001072613-05-001944
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050804
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050809
DATE AS OF CHANGE:		20050809

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NETWORK 1 SECURITY SOLUTIONS INC
		CENTRAL INDEX KEY:			0001065078
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				113027591
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-15288
		FILM NUMBER:		051010548

	BUSINESS ADDRESS:	
		STREET 1:		1601 TRAPELO RD
		STREET 2:		RESERVOIR PLACE
		CITY:			WALTHAM
		STATE:			MA
		ZIP:			02451
		BUSINESS PHONE:		7815223400

	MAIL ADDRESS:	
		STREET 1:		1601 TRAPELO RD
		STREET 2:		RESERVOIR PLACE
		CITY:			WALTHAM
		STATE:			MA
		ZIP:			02451
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8-k_13774.txt
<DESCRIPTION>FORM 8-K  (AUGUST 4, 2005)
<TEXT>
================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  _____________

                                    Form 8-K
                                  _____________

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported):   August 4, 2005
                                                            --------------------




                       Network-1 Security Solutions, Inc.
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



          Delaware                   1-14896                     11-3027591
- --------------------------------------------------------------------------------
(State or other jurisdiction       (Commission                (IRS Employer
     of incorporation)             File Number)              Identification No.)



               445 Park Avenue, Suite 1028, New York, New York 10022
- --------------------------------------------------------------------------------
                    (Address of principal executive offices)



Registrant's telephone number, including area code:  (212) 829-5700



                                       N/A
- --------------------------------------------------------------------------------
         (Former name or former address, if changed since last report.)




Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

================================================================================
<PAGE>
ITEM 1.01    ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
- -------------------------------------------------------

             On August 4, 2005, the Registrant and David C. Kahn entered into an
agreement (the "Agreement") pursuant to which Mr. Kahn agreed to continue to
serve as Chief Financial Officer of the Registrant through December 31, 2006. In
consideration for his services, Mr. Kahn will be compensated at the rate of
$6,000 per month for the period through December 31, 2005 and $6,300 per month
for the year ended December 31, 2006. Mr. Kahn was also issued a ten year option
(the "Option") to purchase 75,000 shares of the Registrant's common stock at an
exercise price of $.80 per share. The option vested 30,000 shares on the date of
grant and the balance of the shares (45,000) will vest on a quarterly basis in
equal amounts of 7,500 shares beginning September 30, 2005 through December 31,
2006. Upon a "Change in Control" (as defined) all of the unvested shares
underlying the Option shall become 100% vested and immediately exercisable.

             The Agreement further provides that the Registrant may terminate
the Agreement at any time for any reason. In the event Mr. Kahn's services are
terminated without "Good Cause" (as defined), he will be entitled to accelerated
vesting of all unvested shares underlying the Option and the lesser of six
months base monthly compensation or the remaining balance of the monthly
compensation payable through December 31, 2006.



ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS
- ----------------------------------------------

(c)      Exhibits

         Exhibit No.       Description
         -----------       -----------

           10.1            Agreement, dated August 4, 2005, between the
                           Registrant and David C. Kahn.
<PAGE>
                                    SIGNATURE
                                    ---------

             Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.





                                  NETWORK-1 SECURITY SOLUTIONS, INC.




Dated:  August 9, 2005            By:  /s/ Corey M. Horowitz
                                       -----------------------------------------
                                       Name:  Corey M. Horowitz
                                       Title: Chairman & Chief Executive Officer
<PAGE>




Exhibit No.       Description
- -----------       -----------

10.1              Agreement, dated August 4, 2005, between the Registrant and
                  David C. Kahn.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10-1_13774.txt
<DESCRIPTION>AGREEMENT - DAVID KAHN
<TEXT>
                                                                    EXHIBIT 10.1
                                                                    ------------








                                 August 4, 2005



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, 2006. In consideration thereof, you shall receive the following
compensation (the "Compensation"):

             (i)  $6000 per month for the period from the date of this letter
through December 31, 2005; and

             (ii) $6300 per month from January 1, 2006 through December 31,
2006.

             Subject to the approval of the Company's Board of Directors, you
will also receive options (the "Option") to purchase 75,000 shraes of common
stock, under the Company's Stock Option Plan, at an exercise price equal to $.80
per share. The Option shall vest as follows: 30,000 shares underlying the Option
shall vest immediately and the balance shall vest on a quarterly basis in equal
amounts through December 31, 2006. Notwithstanding the foregoing, upoon 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.
<PAGE>
David Kahn
August 4, 2005
Page 2




             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 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 will also be required to sign the Company's
standard work for hire non-competition, nondisclosure, and confidentiality
agreement.

             You understand that your relationship with the Company will 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 employment is 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 month's
Compensation or (ii) the remaining balance of the Compensation payable to you
through December 31, 2006. 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.
<PAGE>
David Kahn
August 4, 2005
Page 3




             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



Dated:  August 4, 2005
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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