**Exhibit10.4**

 

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 limitedliability company (the “Company”), and Steven Davis (the “Executive”).

 

R E C I T A L S

 

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

 

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

 

NOW, THEREFORE, in consideration of the foregoingrecitals, the mutual covenants and conditions herein, and other good andvaluable consideration, the receipt and adequacy of which is herebyacknowledged, 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 employsthe Executive and the Executive hereby accepts continuing employment by theCompany on the terms and conditions hereinafter set forth.

 

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

 

3.             Term of Employment.  The term of employment under this Agreement shall commence onMarch 26,  2004 (the “Effective Date”) and shallcontinue for a period of two years, unless earlier terminated as set forth inSection 7 below.  Thereafter, theAgreement shall be automatically renewed for successive one year terms unlesseither the Company or the Executive notifies the other party of non-renewal atleast 90 days prior to the renewal date or unless employment is terminatedpursuant 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 alater one year term, if any, the employment relationship may be terminated atany time pursuant to Section 7.

 

----

 

4.             Compensation.

 

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

 

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

 

4.3           Incentive Compensation.  During his employment hereunder, theExecutive shall be entitled to participate in any incentive compensationprogram approved by the Managers for which he is eligible, with such terms andconditions as determined by the Managers.

 

5.             Other Benefits. During his employment by the Company, the Executive shall be entitled toparticipate in any benefits provided by or through the Company for executivelevel employees at the Executive’s level, subject to any terms, conditions, orrestrictions applicable to such benefits. The Company reserves the right to change these benefits from time totime.** **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 thesame amount and type of health, medical and life insurance, if any, as isprovided from time to time to employees of the Executive’s level during theterm of this Agreement.

 

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

 

5.3           Reimbursement for BusinessExpenses.  Without limiting theforegoing, the Company will reimburse the Executive for reasonable travel,entertainment and other business expenses incurred in connection with theperformance of his duties hereunder, in accordance with the policy of theCompany with respect thereto.

 

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

 

----

 

7.             Termination.

 

7.1           For Cause by the Company.  The Company may terminate the Executive’semployment for cause, effective immediately on the day it sends notice of suchtermination to the Executive.  “Cause”for this purpose shall mean any one or more of the following acts of theExecutive:  (a) continuing materialneglect of duties; (b) fraud, embezzlement or the commission of any act relatingto the business or affairs of the Company involving moral turpitude; (c) grosscarelessness or gross misconduct (i.e., conduct contrary to the Company’spolicies); (d) willful failure to obey the lawful direction of the Company’sManagers ormanagement; or (e) a material violation of any provision of thisAgreement.  On such termination forcause, the Executive shall be entitled to any unpaid salary earned to the dateof such termination, payment at his final salary rate for any accrued butunused vacation, and reimbursement for any expenses reimbursable under thesubstantive and procedural rules of the Company’s business expensereimbursement policy.  Stock options andincentive compensation issues – including such issues as whether incentivecompensation 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’semployment without cause on thirty (30) days’ prior written notice (any attemptby the Company to terminate the Executive’s employment without such noticeshall not be a breach but shall not be effective until 30 days from the date onwhich written notice is provided).  Ontermination without cause by the Company, the Executive shall be entitled toany unpaid salary earned to the date of such termination, payment at his finalsalary rate for any accrued but unused vacation, any severance under otherCompany policies and reimbursement for any expenses reimbursable under thesubstantive and procedural rules of the Company’s business expensereimbursement policy.  Stock options andincentive compensation issues – including such issues as whether incentive compensationhas accrued and/or is payable as of the time of termination – shall be governedby the agreements, plans, and polices then in effect. In addition, the Companyshall provide the following severance benefits upon termination by the Companywithout cause: (a) a payment that is equal to the value of nine months of theExecutive’s then base salary subject to regular payroll withholdings, and (b)reimbursement during the same period for any premium payments made by theExecutive to continue his participation and that of his eligible dependants inthe Company’s group health plans under COBRA, provided that the Executive isentitled to continue such participation under applicable law and plan terms.

 

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

 

----

 

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

 

7.5           Merger; Sale of Assets.  In the event of any voluntary or involuntarydissolution, reorganization, merger, consolidation or transfer of substantiallyall assets of the Company, or in the event of any other act or event of orsuffered by the Company, this Agreement shall not be terminated if a survivingor resulting corporation or other entity or person continues the business ofthe Company and assumes the contractual obligations of the Company vis-à-visthe Executive without interruption.  Inany such event, if the business of the Company is not so continued or thesurviving or resulting corporation or other entity or person does not assumethe contractual obligations of the Company vis-à-vis the Executive, such eventshall be deemed to constitute termination without cause by the Company asprovided in Section 7.2.

 

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

 

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

 

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

 

8.             Proprietary Information.

 

8.1           Proprietary Information.  The Executive shall be required, as acondition of his employment under this agreement, to sign the Company’sstandard Employee Proprietary Information and Inventions Agreement, which isattached hereto as ***Exhibit A***and incorporated herein by reference.

 

8.2           Competition During Employment.  The Executive acknowledges and agrees thathe will not at any time during his employment by the Company directly orindirectly 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, anycorporation, partnership, proprietorship, association, or other entity orperson engaged in developing, producing, designing, providing, solicitingorders for, selling, distributing or marketing products or services or abusiness that directly or indirectly competes with the Company’s products,services or business; provided, however, that the Managers may authorizeexceptions to this prohibition in its sole discretion upon the request of theExecutive.

 

8.3           Solicitation.  The Executive acknowledges and agrees thathe will not at any time during his employment by the Company, or immediatelyfollowing his termination for a period equal to the number of months ofseverance pay he receives from the Company following his termination (but noless than a three month period), hire any employees of the Company or eitherdirectly or indirectly, solicit, induce, recruit or encourage any of theCompany’s employees to leave their employment, or take away such employees, orattempt to solicit, induce, recruit, encourage or take away employees eitherfor himself or for any other person or entity. The Executive further acknowledges and agrees that all customers of theCompany, and all prospective customers from whom he has solicited businesswhile 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, orimmediately following his termination for a period equal to the number ofmonths of severance pay he receives from the Company following his termination(but no less than a three month period), either directly or indirectly, solicitbusiness, 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 asa 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 theCompany, the Executive shall not appropriate for himself or for any otherperson other than the Company or any affiliate of the Company any suchopportunity unless, as to any particular opportunity, the President or Managersof the Company, in their sole discretion, waive the Company’s rights to suchopportunity.  The Executive’s duty torefrain from appropriating all such opportunities shall neither be limited bynor shall such duty limit the application of the law of Arizona relating to thefiduciary duties of an agent or employee.

 

8.5           Interference.  The Executive also acknowledges and agreesthat he will not at any time during his employment by the Company eitherdirectly or indirectly interfere with the Company’s contracts andrelationships, or prospective contracts and relationships, including, but notlimited to, the Company’s customer or client contracts and relationships.

 

8.6           Post-Termination Competition.

 

(a)           The Executive acknowledges and agreesthat following the termination of his employment with the Company for any or noreason, for a period equal to the number of months of severance pay he receivesfrom the Company (but no less than a three month period), he will not directlyor indirectly own an interest in (other than a less than two percent (2%)ownership interest in publicly traded companies), join, operate, control orparticipate in, or be connected as an officer, employee, agent, independentcontractor, consultant, partner, shareholder or principal with, anycorporation, partnership, proprietorship, association, or other entity orperson which

 

----

 

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

 

(b)            The Executive further acknowledgesand agrees that the time, geographic and scope limitations of his obligationsunder subsection (a) above are reasonable, especially in light of the Company’sdesire 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 eachcity, county, state, and country where the Company does business.  Except for geographic coverage, each suchseparate covenant shall be deemed identical in terms to the covenant containedin subsection (a) above.  If, in anyjudicial proceeding, a court refuses to enforce any of such separate covenants(or any part thereof), then such unenforceable covenant (or such part) shall beeliminated from this Agreement to the extent necessary to permit the remainingseparate 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 permittedby applicable law, then such provisions shall be reformed to the maximum time,geographic or scope limitations, as the case may be, then permitted by suchlaw.

 

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

 

9.             Severability. The invalidity or unenforceability of any provision hereof shall in noway affect the validity or enforceability of any other provision hereof.

 

10.           Notices.  Except as otherwise specifically providedherein, any notice, consent, demand or other communication to be given under orin connection with this Agreement shall be in writing and shall be deemed dulygiven when delivered personally, when transmitted by facsimile transmission,one day after being deposited with Federal Express or other nationallyrecognized overnight delivery service or three days after being mailed by firstclass 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 tothe Company.  Either party may changesuch address from time to time by notice to the other.

 

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

 

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

 

----

 

mediator to be jointlyselected by the parties.  The Companywill pay the cost of any mediation.  If themediation does not resolve the dispute or the parties cannot agree on amediator, the parties agree that the dispute shall be resolved by final andbinding arbitration, to be held pursuant to the Employment Dispute ResolutionRules of the American Arbitration Association (“AAA”) in effect at the time ofthe arbitration, before a retired federal judge or justice, applying thesubstantive and procedural laws of Arizona. Except as reviewable, arbitration shall be the exclusive and finalremedy for any dispute between the parties, including but not limited todisputes involving claims for discrimination or harassment (such as claimsunder the Fair Employment and Housing Act, Title VII of the Civil Rights Act of1964, the Americans with Disabilities Act, or the Age Discrimination inEmployment Act), wrongful termination, breach of contract, violation of publicpolicy, physical or mental harm or distress. The parties agree that the arbitrator shall have the power to grant anyform of relief a court of law may provide.

 

13.           Assignment.  Except as otherwise specifically providedherein, neither party shall assign this Agreement or any rights hereunderwithout the consent of the other party, and any attempted or purportedassignment without such consent shall be void.

 

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

 

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

 

16.           Waiver.  Neither party hereto shall be deemed to havewaived any rights under this Agreement unless there is a waiver in writingsigned by the waiving party.  No delayin exercising any right shall be a waiver nor shall a waiver on one occasionoperate as a waiver of such right on a future occasion.

 

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

 

18.           Interpretation.  The language of all parts of this Agreementshall in all cases be construed as a whole, according to its fair meaning, andnot strictly for or against either of the parties.

 

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

 

**(Remainder of page intentionally left blank.)**

 

----

 

IN WITNESS WHEREOF, this Agreement has been dulyexecuted by or on behalf of the parties hereto as of the date first abovewritten.

 

 
|   | **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                                                     |
|        |                                                                        |  |  |  |

 

----

 

**EXHIBIT A**

 

**EMPLOYEE PROPRIETARY INFORMATION ANDINVENTIONS AGREEMENT**

 

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

 

**1.             NONDISCLOSURE.**

 

**1.1****Recognition of Company’s Rights; Nondisclosure**.  At all times during my employment andthereafter, I will hold in strictest confidence and will not disclose, use,lecture upon or publish any of the Company’s Proprietary Information (definedbelow), except as such disclosure, use or publication may be required inconnection with my work for the Company, or unless an officer of the Companyexpressly authorizes such in writing.  Iwill obtain Company’s written approval before publishing or submitting forpublication any material (written, oral, or otherwise) that relates to my workat Company and incorporates any Proprietary Information.  I hereby assign to the Company any rights Imay have or acquire in such Proprietary Information and recognize that allProprietary Information shall be the sole property of the Company and itsassigns.

 

**1.2          Proprietary Information**.  The term “Proprietary Information” shallmean 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 objectcodes, data, programs, other works of authorship, know-how, improvements,discoveries, developments, designs, artwork, techniques, and any otherintellectual 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 andunpublished financial statements, licenses, prices and costs, suppliers andcustomers; and (c) information regarding the skills and compensation ofemployees and other independent contractors of the Company.  Notwithstanding the foregoing, it isunderstood that, at all such times, information which is generally known in thetrade or industry; information which is not gained as result of a breach ofthis Agreement; and information about my own, skill, knowledge, know-how andexperience are not included within the definition of Proprietary Information.

 

----

 

**1.3          Third Party Information**.  I understand, in addition, that the Companyhas received and in the future will receive from third parties confidential orproprietary information (“Third Party Information”), including, but not limitedto, works of authorship, subject to a duty on the Company’s part to maintainthe confidentiality of such information and to use it only for certain limitedpurposes.  During the term of myemployment and thereafter, I will hold Third Party Information in the strictestconfidence and will not disclose to anyone (other than Company personnel whoneed to know such information in connection with their work for the Company) oruse, except in connection with my work for the Company, Third Party Informationunless expressly authorized by an officer of the Company in writing.

 

**1.4                          No Improper Use ofInformation of Prior Employers and Others**.  During my employment by the Company I willnot improperly use or disclose any confidential or proprietary information ortrade secrets, if any, of any former employer or any other person to whom Ihave an obligation of confidentiality, and I will not bring onto the premisesof the Company any unpublished documents or any property belonging to anyformer employer or any other person to whom I have an obligation ofconfidentiality unless consented to in writing by that former employer orperson.  I will use in the performanceof my duties only information which is generally known and used by persons withtraining and experience comparable to my own, which is common knowledge in theindustry or otherwise legally in the public domain, or which is otherwiseprovided or developed by the Company.

 

**2.             ASSIGNMENTOF WORKS FOR HIRE AND OTHER INVENTIONS.**

 

**2.1          Proprietary Rights**.  The term “Proprietary Rights” shall mean allcopyright, trade secret, patent, mask work and other intellectual propertyrights 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 areexcluded 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 Ihave, alone or jointly with others, conceived, developed or reduced to practiceor caused to be conceived, developed or reduced to practice prior to thecommencement of my employment with the Company, that I consider to be myproperty or the property of third parties and that I wish to have excluded fromthe scope of this Agreement (collectively referred to as “Prior Inventions”).  If disclosure of any such Prior Inventionwould cause me to violate any prior confidentiality agreement, I understandthat I am not to list such Prior Inventions in Exhibit A but am only todisclose a cursory name for each such

 

----

 

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

 

**2.3****Assignment of Inventions**.  Subject to Sections 2.4, and 2.6, I herebyassign and agree to assign in the future (when any such Inventions orProprietary Rights are first reduced to practice or first fixed in a tangiblemedium, as applicable) to the Company all my right, title and interest in andto 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 orjointly with others, during the period of my employment with the Company.  Inventions assigned to the Company, or to athird party as directed by the Company pursuant to this Section 2, arehereinafter referred to as “Company Inventions.”

 

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

 

**2.5          Obligation to Keep Company Informed**.  During the period of my employment and forsix (6) months after termination of my employment with the Company, I willpromptly disclose to the Company fully and in writing all Inventions authored,conceived or reduced to practice by me, either alone or jointly withothers.  In addition, I will promptlydisclose to the Company all patent applications filed by me or on my behalfwithin a year after termination of employment. At the time of each such disclosure, I will advise the Company inwriting of any Inventions that I believe fully qualify for protection under ExhibitB**;**and I will at that time provide to the Company in writing all evidencenecessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose ordisclose to third parties without my consent any confidential informationdisclosed in writing to the Company pursuant to this Agreement relating toInventions that qualify fully for protection under Exhibit B.  I will preserve the confidentiality of anyInvention that does not fully qualify for protection under Exhibit B.

 

----

 

**2.6          Government or Third Party**.  I also agree to assign all my right, titleand 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 ofauthorship which are made by me (solely or jointly with others) within thescope of my employment and which are protectable by copyright are “works madefor 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 properway to obtain, and from time to time enforce, United States and foreignProprietary Rights relating to Company Inventions in any and all countries.  To that end I will execute, verify anddeliver such documents and perform such other acts (including appearances as awitness) as the Company may reasonably request for use in applying for,obtaining, perfecting, evidencing, sustaining and enforcing such ProprietaryRights and the assignment thereof.  Inaddition, I will execute, verify and deliver assignments of such ProprietaryRights to the Company or its designee. My obligation to assist the Company with respect to Proprietary Rightsrelating to such Company Inventions in any and all countries shall continuebeyond the termination of my employment, but the Company shall compensate me ata reasonable rate after my termination for the time actually spent by me at theCompany’s request on such assistance. In the event the Company is unable for any reason, after reasonableeffort, to secure my signature on any document needed in connection with theactions specified in the preceding paragraph, I hereby irrevocably designateand appoint the Company and its duly authorized officers and agents as my agentand attorney in fact, which appointment is coupled with an interest, to act forand in my behalf to execute, verify and file any such documents and to do allother lawfully permitted acts to further the purposes of the precedingparagraph with the same legal force and effect as if executed by me.  I hereby waive and quitclaim to the Companyany and all claims, of any nature whatsoever, which I now or may hereafter havefor infringement of any Proprietary Rights assigned hereunder to the Company.

 

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

 

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

 

----

 

entered into, and I agree I will not enter into, any agreement eitherwritten 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 theCompany any and all drawings, notes, memoranda, specifications, devices,formulas, and documents, together with all copies thereof, and any othermaterial containing or disclosing any Company Inventions, Third PartyInformation or Proprietary Information of the Company.  I further agree that any property situatedon the Company’s premises and owned by the Company, including disks and otherstorage media, filing cabinets or other work areas, is subject to inspection byCompany personnel at any time with or without notice.  Prior to leaving, I will cooperate with the Company in completingand signing the Company’s termination statement.

 

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

 

**7.             NOTICES.**  Any notices required or permitted hereundershall 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 theappropriate address or if sent by certified or registered mail, three (3) daysafter the date of mailing.

 

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

 

**9.             GENERALPROVISIONS.**

 

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

 

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

 

----

 

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

 

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

 

**9.4          Survival**.  The provisions of this Agreement shallsurvive the termination of my employment and the assignment of this Agreementby the Company to any successor in interest or other assignee.

 

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

 

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

 

**9.7          Entire Agreement**.  The obligations pursuant to Sections 1 and 2of this Agreement shall apply to any time during which I was previouslyengaged, or am in the future engaged, by the Company as an employee orindependent contractor if no other agreement governs nondisclosure andassignment of inventions during such period. This Agreement is the final, complete and exclusive agreement of theparties with respect to the subject matter hereof and supersedes and merges allprior discussions between us.  Nomodification of or amendment to this Agreement, nor any waiver of any rightsunder this Agreement, will be effective unless in writing and signed by theparty to be charged.  Any subsequentchange or changes in my duties or compensation will not affect the validity orscope of this Agreement.

 

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

 

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTANDITS TERMS.  I HAVE COMPLETELY FILLED OUTEXHIBIT A TO THIS AGREEMENT.

 
| Dated:  3/36/2004 |
|------------------------|
|                   |
| /s/ Steve Davis        |   |
| Steve Davis            |

 

----

 
| ACCEPTED AND AGREED TO:                                               |
|-----------------------------------------------------------------------|
|                                                                  |
| Opta Systems, LLC dba Go Video, a Delaware limited  liability company |
|                                                                  |
|                                                                  |
| By:                                                                   | /s/ Vincent Yan , CEO |   |

 

----

 

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

 

FROM:           Steve Davis

 

DATE:            March 26, 2004

 

SUBJECT:              PreviousInventions

 

**1.**             Except as listed in Section 2below, the following is a complete list of all inventions or improvementsrelevant to the subject matter of my employment by                              .(the “Company”) that have been made or conceived or first reduced to practiceby 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 confidentialityagreement, I cannot complete the disclosure under Section 1 above with respectto inventions or improvements generally listed below, the proprietary rightsand duty of confidentiality with respect to which I owe to the followingparty(ies):

 
| **Invention or Improvement** |   | **Party(ies)** |   | **Relationship** |   |
|------------------------------|--------|----------------|--------|------------------|--------|
|                         |   |           |   |             |   |
| **1.****N/A**                |   |           |   |             |   |
|                         |   |           |   |             |   |
| 2. N/A                       |   |           |   |             |   |
|                         |   |           |   |             |   |
| 3. N/A                       |   |           |   |             |   |

 

o            Additional sheets attached.

 

----

 

**EXHIBIT B**

 

**LIMITED EXCLUSION NOTIFICATION**

 

**THIS IS TO NOTIFY** you that the foregoingAgreement between you and the Company does not require you to assign or offerto assign to the Company any invention that you developed entirely on your owntime without using the Company’s equipment, supplies, facilities or tradesecret information except for those inventions that either:

 

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

 

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

 

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

 

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

 

I ACKNOWLEDGE RECEIPT of a copy of this notification.

 
| By:            | /s/ Steve Davis |   |   |
|----------------|-----------------|--------|--------|
|           | *(Signature)*   |   |
|           |            |
| MARCH 26, 2004 |            |

 

----