Exhibit 10.4

 

Executive Employment Agreement

 

This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of March 26, 2004,
by and between Opta Systems, LLC dba Go Video, a Delaware limited liability
company (the “Company”), and Steven Davis (the “Executive”).

 

R E C I T A L S

 

WHEREAS, the Executive is employed by the Company and currently serves as its
Chief Financial Officer; and

 

WHEREAS, the Company and the Executive wish to continue with their employment
relationship on more specific terms and have determined that it is in the best
interests of both to enter into this Agreement for that purpose.

 

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants
and conditions herein, and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereby agree as
follows:

 

A G R E E M E N T

 

1.             Employment; Acceptance.  Effective as of March 21, 2004, the
Company hereby employs the Executive and the Executive hereby accepts continuing
employment by the Company on the terms and conditions hereinafter set forth.

 

2.             Duties and Powers.  Executive shall serve as the Company’s Chief
Financial Officer.  The Executive shall be responsible for all financial matters
relating to the Company, subject to the direction and control of the President
and the Managers of the Company (the “Managers”) and/or the Operating Agreement
of the Company, this Agreement, and applicable law.  The Executive agrees to
devote his best efforts, diligence, and abilities and his full attention to the
business and affairs of the Company and to the performance of his duties as the
Company’s Chief Financial Officer, to the exclusion of any other occupation or
endeavor other than community, charitable, political, and personal pursuits that
do not interfere with his performance under this Agreement; provided, however,
that the President or Managers may authorize other exceptions in their sole
discretion upon the request of the Executive.

 

3.             Term of Employment.  The term of employment under this Agreement
shall commence on March 26,  2004 (the “Effective Date”) and shall continue for
a period of two years, unless earlier terminated as set forth in Section 7
below.  Thereafter, the Agreement shall be automatically renewed for successive
one year terms unless either the Company or the Executive notifies the other
party of non-renewal at least 90 days prior to the renewal date or unless
employment is terminated pursuant to Section 7 prior to the commencement of what
would be the next term. Regardless of whether the operative term is the initial
two year term or a later one year term, if any, the employment relationship may
be terminated at any time pursuant to Section 7.

 

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4.             Compensation.

 

4.1           Salary.  The Company hereby agrees to pay to the Executive during
his employment hereunder a base salary (starting at the equivalent of $84,000
per year) payable in equal installments on the Company’s regular paydays.  If
the Executive’s employment is terminated on any date other than a regular
payday, the final salary payable pursuant to this Section 4.1 shall be paid to
the Executive on a prorated basis.

 

4.2           Options.  The Executive is entitled to participate in the Equity
Incentive Plan of Lotus Pacific, Inc. (“Lotus”), the parent company of the
Company.

 

4.3           Incentive Compensation.  During his employment hereunder, the
Executive shall be entitled to participate in any incentive compensation program
approved by the Managers for which he is eligible, with such terms and
conditions as determined by the Managers.

 

5.             Other Benefits.  During his employment by the Company, the
Executive shall be entitled to participate in any benefits provided by or
through the Company for executive level employees at the Executive’s level,
subject to any terms, conditions, or restrictions applicable to such benefits. 
The Company reserves the right to change these benefits from time to time.  Such
benefits would include:

 

5.1           Health, Medical and Life Insurance.  While the Executive is
employed hereunder, the Company shall pay for and provide the Executive and his
dependents with the same amount and type of health, medical and life insurance,
if any, as is provided from time to time to employees of the Executive’s level
during the term of this Agreement.

 

5.2           Vacation.  The Executive shall be entitled to vacation with pay in
accordance with the Company’s vacation policy as in effect at the time in
question.  In addition, the Executive shall be entitled to such holidays as the
Company may approve for its employees of the Executive’s level.

 

5.3           Reimbursement for Business Expenses.  Without limiting the
foregoing, the Company will reimburse the Executive for reasonable travel,
entertainment and other business expenses incurred in connection with the
performance of his duties hereunder, in accordance with the policy of the
Company with respect thereto.

 

6.             Key Person Insurance.  The Company shall have the right, at its
sole expense, to procure life or disability insurance on the Executive for its
own benefit in such amount or amounts it shall deem appropriate (such
determination to be at the sole discretion of the Managers), and the Executive
hereby agrees to cooperate, upon reasonable request, in obtaining or renewing
such insurance from time to time, including without limitation, submission to
physical examination and execution of normal and customary documents pertaining
to such insurance.  The Company shall have no right to terminate this Agreement
based upon the results of a physical or other examination to which the Executive
submits pursuant to this paragraph or by reason of failure of the Executive to
qualify for any such insurance.

 

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7.             Termination.

 

7.1           For Cause by the Company.  The Company may terminate the
Executive’s employment for cause, effective immediately on the day it sends
notice of such termination to the Executive.  “Cause” for this purpose shall
mean any one or more of the following acts of the Executive:  (a) continuing
material neglect of duties; (b) fraud, embezzlement or the commission of any act
relating to the business or affairs of the Company involving moral turpitude;
(c) gross carelessness or gross misconduct (i.e., conduct contrary to the
Company’s policies); (d) willful failure to obey the lawful direction of the
Company’s Managers or management; or (e) a material violation of any provision
of this Agreement.  On such termination for cause, the Executive shall be
entitled to any unpaid salary earned to the date of such termination, payment at
his final salary rate for any accrued but unused vacation, and reimbursement for
any expenses reimbursable under the substantive and procedural rules of the
Company’s business expense reimbursement policy.  Stock options and incentive
compensation issues – including such issues as whether incentive compensation
has accrued and/or is payable as of the time of termination – shall be governed
by the agreements, plans, and polices then in effect.

 

7.2           Without Cause by the Company.  The Company may terminate the
Executive’s employment without cause on thirty (30) days’ prior written notice
(any attempt by the Company to terminate the Executive’s employment without such
notice shall not be a breach but shall not be effective until 30 days from the
date on which written notice is provided).  On termination without cause by the
Company, the Executive shall be entitled to any unpaid salary earned to the date
of such termination, payment at his final salary rate for any accrued but unused
vacation, any severance under other Company policies and reimbursement for any
expenses reimbursable under the substantive and procedural rules of the
Company’s business expense reimbursement policy.  Stock options and incentive
compensation issues – including such issues as whether incentive compensation
has accrued and/or is payable as of the time of termination – shall be governed
by the agreements, plans, and polices then in effect. In addition, the Company
shall provide the following severance benefits upon termination by the Company
without cause: (a) a payment that is equal to the value of nine months of the
Executive’s then base salary subject to regular payroll withholdings, and (b)
reimbursement during the same period for any premium payments made by the
Executive to continue his participation and that of his eligible dependants in
the Company’s group health plans under COBRA, provided that the Executive is
entitled to continue such participation under applicable law and plan terms.

 

7.3           Disability.  If the Executive becomes unable to perform his duties
hereunder because of any physical, mental or legal disability (including
sickness or an injunction or similar order or decree of a court of competent
jurisdiction preventing the performance of his duties hereunder), he shall be
entitled to his compensation as provided herein until the total period of
disability (whether or not continuous and whether or not the same disability)
exceeds an aggregate of one hundred eighty (180) days in any calendar year.  If
the total period of disability exceeds an aggregate of one hundred eighty (180)
days in any calendar year, the Company may terminate his employment upon notice
to the Executive, and such termination otherwise shall be treated as a
termination for cause by the Company pursuant to Section 7.1.

 

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7.4           Death.  In the event of the death of the Executive, his employment
shall be terminated immediately without any notice procedure.  In the event of
such a termination, the Executive’s legal representative shall be entitled to
any unpaid salary earned to the date of such termination, payment at the
Executive’s final salary rate for any accrued but unused vacation, and
reimbursement for any expenses reimbursable under the substantive and procedural
rules of the Company’s business expense reimbursement policy.  Stock options and
incentive compensation issues – including such issues as whether incentive
compensation has accrued and/or is payable as of the time of termination – shall
be governed by the agreements, plans, and polices then in effect.

 

7.5           Merger; Sale of Assets.  In the event of any voluntary or
involuntary dissolution, reorganization, merger, consolidation or transfer of
substantially all assets of the Company, or in the event of any other act or
event of or suffered by the Company, this Agreement shall not be terminated if a
surviving or resulting corporation or other entity or person continues the
business of the Company and assumes the contractual obligations of the Company
vis-à-vis the Executive without interruption.  In any such event, if the
business of the Company is not so continued or the surviving or resulting
corporation or other entity or person does not assume the contractual
obligations of the Company vis-à-vis the Executive, such event shall be deemed
to constitute termination without cause by the Company as provided in Section
7.2.

 

7.6           Termination Due to Diminution of Duties.   If the Executive’s
duties, as described in Section 2 of this Agreement and by the Company’s and
Executive’s pattern and practice, are changed so as to significantly diminish
the essential authorities, powers, functions, duties or responsibilities
attached to the Executive’s position which is not remedied within thirty (30)
days after receipt by the Company of written notice from the Executive, the
parties agree that the Executive may resign and that such termination of his
employment shall be treated as a termination without cause by the Company
pursuant to Section 7.2.

 

7.7           Resignation of Other Positions.  Upon termination of employment
for any reason whatsoever, the Executive shall be deemed to have resigned from
any office(s) then held by him with the Company.

 

7.8           Nonrenewal.  The Company may decide not to renew this employment
contract for additional one year terms by notifying the Executive at least 90
days prior to the renewal date of the Agreement.  Upon such nonrenewal, the
Agreement will terminate and the Executive will become eligible to receive any
severance payment he would be eligible under any other Company policies except
this Agreement as though he had been terminated without cause.

 

8.             Proprietary Information.

 

8.1           Proprietary Information.  The Executive shall be required, as a
condition of his employment under this agreement, to sign the Company’s standard
Employee Proprietary Information and Inventions Agreement, which is attached
hereto as Exhibit A and incorporated herein by reference.

 

8.2           Competition During Employment.  The Executive acknowledges and
agrees that he will not at any time during his employment by the Company
directly or indirectly own an interest in (other than a less than two percent
(2%) ownership interest in publicly traded companies), join,

 

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operate, control or participate in, or be connected as an officer, employee,
agent, independent contractor, consultant, partner, shareholder or principal
with, any corporation, partnership, proprietorship, association, or other entity
or person engaged in developing, producing, designing, providing, soliciting
orders for, selling, distributing or marketing products or services or a
business that directly or indirectly competes with the Company’s products,
services or business; provided, however, that the Managers may authorize
exceptions to this prohibition in its sole discretion upon the request of the
Executive.

 

8.3           Solicitation.  The Executive acknowledges and agrees that he will
not at any time during his employment by the Company, or immediately following
his termination for a period equal to the number of months of severance pay he
receives from the Company following his termination (but no less than a three
month period), hire any employees of the Company or either directly or
indirectly, solicit, induce, recruit or encourage any of the Company’s employees
to leave their employment, or take away such employees, or attempt to solicit,
induce, recruit, encourage or take away employees either for himself or for any
other person or entity.  The Executive further acknowledges and agrees that all
customers of the Company, and all prospective customers from whom he has
solicited business while employed with the Company, shall be solely the
customers of the Company, and that he will not at any time during his employment
by the Company, or immediately following his termination for a period equal to
the number of months of severance pay he receives from the Company following his
termination (but no less than a three month period), either directly or
indirectly, solicit business, as to products or services competitive with those
of the Company, from any of the Company’s customers with whom he has had contact
during and as a result of his employment by the Company.

 

8.4           Corporate Opportunities.  If the Executive, during his employment,
shall become aware of any business opportunity related to the business of the
Company, the Executive shall not appropriate for himself or for any other person
other than the Company or any affiliate of the Company any such opportunity
unless, as to any particular opportunity, the President or Managers of the
Company, in their sole discretion, waive the Company’s rights to such
opportunity.  The Executive’s duty to refrain from appropriating all such
opportunities shall neither be limited by nor shall such duty limit the
application of the law of Arizona relating to the fiduciary duties of an agent
or employee.

 

8.5           Interference.  The Executive also acknowledges and agrees that he
will not at any time during his employment by the Company either directly or
indirectly interfere with the Company’s contracts and relationships, or
prospective contracts and relationships, including, but not limited to, the
Company’s customer or client contracts and relationships.

 

8.6           Post-Termination Competition.

 

(a)           The Executive acknowledges and agrees that following the
termination of his employment with the Company for any or no reason, for a
period equal to the number of months of severance pay he receives from the
Company (but no less than a three month period), he will not directly or
indirectly own an interest in (other than a less than two percent (2%) ownership
interest in publicly traded companies), join, operate, control or participate
in, or be connected as an officer, employee, agent, independent contractor,
consultant, partner, shareholder or principal with, any corporation,
partnership, proprietorship, association, or other entity or person which

 

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operates or intends (as of the date of Executive’s termination) to operate a
business that directly or indirectly competes with the Company’s products,
services or business in any territory where the Company does business.

 

(b)           The Executive further acknowledges and agrees that the time,
geographic and scope limitations of his obligations under subsection (a) above
are reasonable, especially in light of the Company’s desire to protect its
proprietary and confidential information.

 

(c)           The covenant contained in subsection (a) above shall be construed
as a series of separate covenants, one for each city, county, state, and country
where the Company does business.  Except for geographic coverage, each such
separate covenant shall be deemed identical in terms to the covenant contained
in subsection (a) above.  If, in any judicial proceeding, a court refuses to
enforce any of such separate covenants (or any part thereof), then such
unenforceable covenant (or such part) shall be eliminated from this Agreement to
the extent necessary to permit the remaining separate covenants (or portions
thereof) to be enforced.  In the event the provisions of subsection (a) above
are deemed to exceed the time, geographic or scope limitations permitted by
applicable law, then such provisions shall be reformed to the maximum time,
geographic or scope limitations, as the case may be, then permitted by such law.

 

8.7           Injunctive Relief.  The Executive acknowledges and agrees that his
failure to perform any of his covenants in this Section 8, including those in
the Employee Proprietary Information and Inventions Agreement, would cause
irreparable injury to the Company and cause damages to the Company which would
be difficult or impossible to ascertain or quantify.  Accordingly, without
limiting any remedies that may be available with respect to any breach of this
Agreement, the Executive consents to the entry of an injunction to restrain any
breach of this Section

 

9.             Severability.  The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof.

 

10.           Notices.  Except as otherwise specifically provided herein, any
notice, consent, demand or other communication to be given under or in
connection with this Agreement shall be in writing and shall be deemed duly
given when delivered personally, when transmitted by facsimile transmission, one
day after being deposited with Federal Express or other nationally recognized
overnight delivery service or three days after being mailed by first class mail,
charges or postage prepaid, properly addressed, if to the Company, at its
principal office, and, if to the Executive, at his address last known to the
Company.  Either party may change such address from time to time by notice to
the other.

 

11.           Governing Law.  This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of Arizona.

 

12.           Arbitration.  EXCEPT AS SET FORTH IN SECTION 8.7 HEREOF, THE
COMPANY AND THE EXECUTIVE WAIVE THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING
ANY RIGHT TO A JURY TRIAL.  The Company and the Executive agree that in the
event of any dispute arising between the Company and the Executive in connection
with this Agreement, such disputes shall be resolved by final and binding
arbitration in accordance with the following procedures:  The parties shall
first submit any dispute to non-binding mediation before a

 

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mediator to be jointly selected by the parties.  The Company will pay the cost
of any mediation.  If the mediation does not resolve the dispute or the parties
cannot agree on a mediator, the parties agree that the dispute shall be resolved
by final and binding arbitration, to be held pursuant to the Employment Dispute
Resolution Rules of the American Arbitration Association (“AAA”) in effect at
the time of the arbitration, before a retired federal judge or justice, applying
the substantive and procedural laws of Arizona.  Except as reviewable,
arbitration shall be the exclusive and final remedy for any dispute between the
parties, including but not limited to disputes involving claims for
discrimination or harassment (such as claims under the Fair Employment and
Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, or the Age Discrimination in Employment Act), wrongful
termination, breach of contract, violation of public policy, physical or mental
harm or distress.  The parties agree that the arbitrator shall have the power to
grant any form of relief a court of law may provide.

 

13.           Assignment.  Except as otherwise specifically provided herein,
neither party shall assign this Agreement or any rights hereunder without the
consent of the other party, and any attempted or purported assignment without
such consent shall be void.

 

14.           Entire Agreement; Modification.  This Agreement contains the
entire agreement of the parties and supersedes all prior or contemporaneous
negotiations, correspondence, understandings and agreements between the parties
regarding the subject matter of this Agreement.  This Agreement may not be
amended or modified except in a writing signed by both parties.

 

15.           Counterparts.  This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same agreement.

 

16.           Waiver.  Neither party hereto shall be deemed to have waived any
rights under this Agreement unless there is a waiver in writing signed by the
waiving party.  No delay in exercising any right shall be a waiver nor shall a
waiver on one occasion operate as a waiver of such right on a future occasion.

 

17.           Headings.  Section headings contained in this Agreement are for
convenience only and shall not be considered for any purpose in construing the
Agreement.

 

18.           Interpretation.  The language of all parts of this Agreement shall
in all cases be construed as a whole, according to its fair meaning, and not
strictly for or against either of the parties.

 

19.           Exhibits.  All Exhibits referred to are attached to this Agreement
and incorporated herein by this reference and made a part hereof.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by or on behalf of the
parties hereto as of the date first above written.

 

 

 

COMPANY:

 

 

 

Opta Systems, LLC dba Go Video, a Delaware
limited liability company

 

 

 

 

 

By:

/s/ Vincent Yan

 

 

 Name:

Vincent Yan

 

Its:

CEO

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

/s/ Steve Davis

 

 

Name: Steven Davis

 

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EXHIBIT A

 

EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

In consideration of my continued employment by Opta Systems, LLC dba Go Video, a
Delaware limited liability company (the “Company”), and the Executive Employment
Agreement into which this is incorporated, I hereby agree as follows:

 

1.             NONDISCLOSURE.

 

1.1 Recognition of Company’s Rights; Nondisclosure.  At all times during my
employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company’s Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing.  I will obtain Company’s
written approval before publishing or submitting for publication any material
(written, oral, or otherwise) that relates to my work at Company and
incorporates any Proprietary Information.  I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information and recognize that
all Proprietary Information shall be the sole property of the Company and its
assigns.

 

1.2          Proprietary Information.  The term “Proprietary Information” shall
mean any and all confidential and/or proprietary works of authorship, knowledge,
data, designs or information of the Company.  By way of illustration but not
limitation, “Proprietary Information” includes (a) patents, trademarks, trade
secrets, inventions, copyrights, mask works, processes, formulas, source and
object codes, data, programs, other works of authorship, know-how, improvements,
discoveries, developments, designs, artwork, techniques, and any other
intellectual property that is protectable under United States or foreign laws
(hereinafter collectively referred to as “Inventions”); and (b) research,
development, new products, marketing and selling, business plans, budgets and
unpublished financial statements, licenses, prices and costs, suppliers and
customers; and (c) information regarding the skills and compensation of
employees and other independent contractors of the Company.  Notwithstanding the
foregoing, it is understood that, at all such times, information which is
generally known in the trade or industry; information which is not gained as
result of a breach of this Agreement; and information about my own, skill,
knowledge, know-how and experience are not included within the definition of
Proprietary Information.

 

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1.3          Third Party Information.  I understand, in addition, that the
Company has received and in the future will receive from third parties
confidential or proprietary information (“Third Party Information”), including,
but not limited to, works of authorship, subject to a duty on the Company’s part
to maintain the confidentiality of such information and to use it only for
certain limited purposes.  During the term of my employment and thereafter, I
will hold Third Party Information in the strictest confidence and will not
disclose to anyone (other than Company personnel who need to know such
information in connection with their work for the Company) or use, except in
connection with my work for the Company, Third Party Information unless
expressly authorized by an officer of the Company in writing.

 

1.4                          No Improper Use of Information of Prior Employers
and Others.  During my employment by the Company I will not improperly use or
disclose any confidential or proprietary information or trade secrets, if any,
of any former employer or any other person to whom I have an obligation of
confidentiality, and I will not bring onto the premises of the Company any
unpublished documents or any property belonging to any former employer or any
other person to whom I have an obligation of confidentiality unless consented to
in writing by that former employer or person.  I will use in the performance of
my duties only information which is generally known and used by persons with
training and experience comparable to my own, which is common knowledge in the
industry or otherwise legally in the public domain, or which is otherwise
provided or developed by the Company.

 

2.             ASSIGNMENT OF WORKS FOR HIRE AND OTHER INVENTIONS.

 

2.1          Proprietary Rights.  The term “Proprietary Rights” shall mean all
copyright, trade secret, patent, mask work and other intellectual property
rights throughout the world.

 

2.2          Prior Inventions.  Inventions, if any, patented or unpatented,
which I made prior to the commencement of my employment with the Company are
excluded from the scope of this Agreement.  To preclude any possible
uncertainty, I have set forth on Exhibit A (Previous Inventions) attached hereto
a complete list of all Inventions that I have, alone or jointly with others,
conceived, developed or reduced to practice or caused to be conceived, developed
or reduced to practice prior to the commencement of my employment with the
Company, that I consider to be my property or the property of third parties and
that I wish to have excluded from the scope of this Agreement (collectively
referred to as “Prior Inventions”).  If disclosure of any such Prior Invention
would cause me to violate any prior confidentiality agreement, I understand that
I am not to list such Prior Inventions in Exhibit A but am only to disclose a
cursory name for each such

 

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invention, a listing of the party(ies) to whom it belongs and the fact that full
disclosure as to such inventions has not been made for that reason. A space is
provided on Exhibit A for such purpose.  If no such disclosure is attached, I
represent that there are no Prior Inventions.  If, in the course of my
employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, and it is within any power to grant, I grant to the
Company a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license
(with rights to sublicense through multiple tiers of sublicensees) to make, have
made, modify, use and sell such Prior Invention.  Notwithstanding the foregoing,
I agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company Inventions without the Company’s prior written
consent.

 

2.3 Assignment of Inventions.  Subject to Sections 2.4, and 2.6, I hereby assign
and agree to assign in the future (when any such Inventions or Proprietary
Rights are first reduced to practice or first fixed in a tangible medium, as
applicable) to the Company all my right, title and interest in and to any and
all Inventions (and all Proprietary Rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made or conceived
or reduced to practice or learned by me, either alone or jointly with others,
during the period of my employment with the Company.  Inventions assigned to the
Company, or to a third party as directed by the Company pursuant to this Section
2, are hereinafter referred to as “Company Inventions.”

 

2.4          Nonassignable Inventions.  This Agreement does not apply to an
Invention which qualifies fully as a nonassignable Invention pursuant to Exhibit
B.  I have reviewed the notification on Exhibit B (Limited Exclusion
Notification) and agree that my signature acknowledges receipt of the
notification.

 

2.5          Obligation to Keep Company Informed.  During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others.  In addition, I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after termination
of employment.  At the time of each such disclosure, I will advise the Company
in writing of any Inventions that I believe fully qualify for protection under
Exhibit B; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief.  The Company will keep in
confidence and will not use for any purpose or disclose to third parties without
my consent any confidential information disclosed in writing to the Company
pursuant to this Agreement relating to Inventions that qualify fully for
protection under Exhibit B.  I will preserve the confidentiality of any
Invention that does not fully qualify for protection under Exhibit B.

 

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2.6          Government or Third Party.  I also agree to assign all my right,
title and interest in and to any particular Company Invention to a third party,
including without limitation the United States, as directed by the Company.

 

2.7          Works for Hire.  I acknowledge that all original works of
authorship which are made by me (solely or jointly with others) within the scope
of my employment and which are protectable by copyright are “works made for
hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101).

 

2.8          Enforcement of Proprietary Rights.  I will assist the Company in
every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to Company Inventions in any and all
countries.  To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment thereof.  In
addition, I will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee.  My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any and all
countries shall continue beyond the termination of my employment, but the
Company shall compensate me at a reasonable rate after my termination for the
time actually spent by me at the Company’s request on such assistance.  In the
event the Company is unable for any reason, after reasonable effort, to secure
my signature on any document needed in connection with the actions specified in
the preceding paragraph, I hereby irrevocably designate and appoint the Company
and its duly authorized officers and agents as my agent and attorney in fact,
which appointment is coupled with an interest, to act for and in my behalf to
execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph with the same
legal force and effect as if executed by me.  I hereby waive and quitclaim to
the Company any and all claims, of any nature whatsoever, which I now or may
hereafter have for infringement of any Proprietary Rights assigned hereunder to
the Company.

 

3.             RECORDS.  I agree to keep and maintain adequate and current
records (in the form of notes, sketches, drawings and in any other form that may
be required by the Company) of all Proprietary Information developed by me and
all Inventions made by me during the period of my employment at the Company,
which records shall be available to and remain the sole property of the Company
at all times.

 

4.             NO CONFLICTING OBLIGATION.  I represent that my performance of
all the terms of this Agreement does not and will not breach any agreement to
keep in confidence information acquired by me in confidence or in trust prior to
my employment by the Company.  I have not

 

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entered into, and I agree I will not enter into, any agreement either written or
oral in conflict herewith.

 

5.             RETURN OF COMPANY DOCUMENTS.  When I leave the employment with
the Company (whether voluntarily or involuntarily), I will (upon request)
deliver to the Company any and all drawings, notes, memoranda, specifications,
devices, formulas, and documents, together with all copies thereof, and any
other material containing or disclosing any Company Inventions, Third Party
Information or Proprietary Information of the Company.  I further agree that any
property situated on the Company’s premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice.  Prior to
leaving, I will cooperate with the Company in completing and signing the
Company’s termination statement.

 

6.             LEGAL AND EQUITABLE REMEDIES.  Because my services are personal
and unique and because I may have access to and become acquainted with the
Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to any
other rights and remedies that the Company may have for a breach of this
Agreement.

 

7.             NOTICES.  Any notices required or permitted hereunder shall be
given, if to the Company, at the address of its principal office and, if to me,
at my address last known to the Company.  Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.

 

8.             NOTIFICATION OF NEW EMPLOYER.  In the event that I leave the
employment of the Company, I hereby consent to the notification of any new
employer by the Company of my rights and obligations under this Agreement.

 

9.             GENERAL PROVISIONS.

 

9.1          Governing Law.  This Agreement will be governed by and construed
according to the laws of the State of Arizona.

 

9.2          Severability.  In case any one or more of the provisions contained
in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.  If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively

 

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broad as to duration, geographical scope, activity or subject, it shall be
construed by limiting and reducing it, so as to be enforceable to the extent
compatible with the applicable law as it shall then appear.

 

9.3          Successors and Assigns.  This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.

 

9.4          Survival.  The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.

 

9.5          Employment.  I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company’s right
to terminate my employment at any time, with or without cause.

 

9.6          Waiver.  No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach.  No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right.  The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.

 

9.7          Entire Agreement.  The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously engaged, or
am in the future engaged, by the Company as an employee or independent
contractor if no other agreement governs nondisclosure and assignment of
inventions during such period.  This Agreement is the final, complete and
exclusive agreement of the parties with respect to the subject matter hereof and
supersedes and merges all prior discussions between us.  No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing and signed by the party to be charged.  Any
subsequent change or changes in my duties or compensation will not affect the
validity or scope of this Agreement.

 

This Agreement shall be effective as of the first day of my employment with the
Company.

 

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

 

Dated:  3/36/2004

 

/s/ Steve Davis

 

Steve Davis

 

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ACCEPTED AND AGREED TO:

 

Opta Systems, LLC dba Go Video, a Delaware limited liability company

 

 

By:

/s/ Vincent Yan , CEO

 

 

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TO:                 Opta Systems, LLC dba Go Video, a Delaware limited liability
company

 

FROM:           Steve Davis

 

DATE:            March 26, 2004

 

SUBJECT:              Previous Inventions

 

1.             Except as listed in Section 2 below, the following is a complete
list of all inventions or improvements relevant to the subject matter of my
employment by                               . (the “Company”) that have been
made or conceived or first reduced to practice by me alone or jointly with
others prior to my employment by the Company:

 

o            No inventions or improvements.

 

o            See below:

 

o            Additional sheets attached.

 

2.             Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):

 

Invention or Improvement

 

Party(ies)

 

Relationship

 

 

 

 

 

 

 

1. N/A

 

 

 

 

 

 

 

 

 

 

 

2. N/A

 

 

 

 

 

 

 

 

 

 

 

3. N/A

 

 

 

 

 

 

o            Additional sheets attached.

 

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EXHIBIT B

 

LIMITED EXCLUSION NOTIFICATION

 

THIS IS TO NOTIFY you that the foregoing Agreement between you and the Company
does not require you to assign or offer to assign to the Company any invention
that you developed entirely on your own time without using the Company’s
equipment, supplies, facilities or trade secret information except for those
inventions that either:

 

1. Relate at the time of conception or reduction to practice of the invention to
the Company’s business, or actual or demonstrably anticipated research or
development of the Company; or

 

2. Result from any work performed by you for the Company.

 

To the extent a provision in the foregoing Agreement purports to require you to
assign an invention otherwise excluded from the preceding paragraph, the
provision is unenforceable.

 

This limited exclusion does not apply to any patent or invention covered by a
contract between the Company and the United States or any of its agencies
requiring full title to such patent or invention to be in the United States.

 

I ACKNOWLEDGE RECEIPT of a copy of this notification.

 

By:

/s/ Steve Davis

 

 

 

(Signature)

 

 

 

MARCH 26, 2004

 

 

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