<PAGE>

EXHIBIT 10.38

                              Consulting Agreement
                                                                   July 19, 2005
                             New Visual Corporation

CONSULTING AGREEMENT

This Consulting (the "Agreement") is entered into this 19th day of July, 2005,
by and between Richard Hurn, an individual and resident of Portland, Oregon (the
"Consultant"), and New Visual Corporation, having its principal place of
business in, 305 NE 102nd Ave., Suite 105, Portland, OR 97220 (the "Company"),
collectively the "Parties."

1. Scope of Work, Compensation:

The Consultant shall consult with the Company and perform marketing activities
related to the new product introduction of the EmbarqTM family of transport
processors, and related activities for the benefit of the Company and its
subsidiaries. Such activities may include, but will not be limited to,

      o    the assessment of a chip level market position identifying strengths
           and weaknesses of the chip verses other standard and non-standard
           wireline chip technologies;
      o    the creation of marketing collateral, such as PowerPoint
           presentations, brochures, white papers, enhancements to the existing
           website, trade show booths, and business cases;
      o    the assessment of a customer level market position identifying the
           need for various wireline broadband applications for market entry
      o    the creation of customer value drivers; and
      o    such similar activities as shall benefit the Company.

During the term of this Agreement (i.e., the Initial Term and any extended
terms), Consultant shall devote a minimum of 40 hours per week to the above
activities.

The Consultant shall report directly to the Chief Executive Officer of the
Company. Although the Company shall provide input and guidance to the Consultant
regarding business objectives and other matters, the Consultant shall act as he
deems appropriate in order to foster the business interests of the Company.

Consultant will be compensated at a monthly rate of $8,000 per month. The first
payment of $2,800 will be issued upon signature of this agreement. Subsequent
payments of $4,000 will be paid by the 1st and the 15th of each month during the
term of this Agreement (i.e., the Initial Term and any extended terms). Out of
pocket expenses for approved Company business, including but not limited to
travel expenses of Consultant, shall be reimbursed by the Company after
submission of appropriate receipts, and if they are in accordance with Company's
Travel and Entertainment policy.

                                       1
<PAGE>

2. Initial Term, Automatic Renewal:

The "Initial Term" of this Agreement shall be from the date of this Agreement
set forth above and remain in place for six consecutive months, unless earlier
terminated pursuant to Paragraph 3 of this Agreement. After the Initial Term,
this Agreement shall automatically be renewed for successive three month terms,
unless one or both Parties delivers a written notice to the other Party electing
not to renew for such a successive term. Any such notice of non-renewal must be
received by the other Party not less than forty five (45) days prior to the
expiration of either the Initial Term, or any extended three month term, as
appropriate.

3. Termination, Enter Full Time Employment:

(a) After or during the Initial Term of this Agreement, the Company and
consultant may mutually agree to terminate this Agreement and enter into a full
time employment arrangement.

(b) After or during the Initial Term of this Agreement, the Company and
consultant may mutually agree to terminate this Agreement based on an
understanding of various business or personal circumstances.

4. Protection of Confidential Information:

In the course of performing under this Agreement, Consultant will create, have
access to, and acquire knowledge regarding "Confidential Information" belonging
to the Company, its clients, or others. Consultant agrees that it will not
directly or indirectly, disclose, reveal, publish, transfer or use any
Confidential Information for the benefit of the Consultant or any other person.
Consultant may use and disclose Confidential Information (i) with the prior
written consent of the Company, or (ii) during the course of this Agreement with
the Company, for the benefit of the Company or its clients in the furtherance of
the Company's business, and subject to the Company's policies and the direction
of the Company.

5. Ownership of Work Product:

The Intellectual Property created by Consultant pursuant to this Agreement for
the Company shall belong to the Company under the terms of this section.

6. Administrative Provisions:

(a) Choice of law, selection of exclusive venue, and consent to personal
jurisdiction: This Agreement shall be interpreted and governed by the laws of
the State of Oregon.

(b) Entire Agreement: This Agreement contains the entire agreement between the
parties, and except as stated in this Agreement, there are no oral or written
promises, agreements, warranties, obligations, assurances, or conditions
precedent or otherwise affecting it. Any change, modification, or alteration of
this Letter Agreement shall be in writing, signed by the parties to this Letter
Agreement, and no course of dealing between the parties shall be construed to
alter the terms hereof, except as stated in this Letter Agreement.

                                       2
<PAGE>


IN WITNESS WHEREOF, the Company and Consultant have caused this Agreement to be
signed below by their duly authorized representatives, all as of the date first
written above.

New Visual Corporation                       Consultant


By:    /s/ Brad Ketch                        By:    /s/ Richard Hurn
         ---------------                            ------------------
Name: Brad Ketch                             Name:  Richard Hurn

Title: President and CEO                     Date:  Jul 20 '05

Date: July 20, 2005


                                       3
<PAGE>

                                   APPENDIX 1


1.   The Effective Date of this Agreement is: 7/19/05

2.   The other Party to this Agreement is:
     Corporate Name:    Richard Hurn
     Principal Address: 2335 N Marine Dr, Portland Or 97217

3.   The Confidential Information to be exchanged hereunder is:

      3.1. New Visual Corporation Confidential Information: (be specific)
           >>       Technology White Papers
           >>       Project Development Plans
           >>       Business Plans

     3.2. Company/Individual Confidential Information: (be specific) (to be
          provided by company or /individual).
          >> None

4.   The coordinator of Confidential Information for each Party shall be:

         New Visual Corporation
         Brad Ketch
         President and CEO
         305 NE 102nd Ave, Suite 105
         Portland, OR 97220
         503-257-6700
         503-257-6622
         bketch@newvisual.com

         (company)

         Name -  Richard Hurn
         Title - Consultant
         Address- 2335 N. Marine Dr. Portland, OR 97217
         Telephone- 503-286-0894
         Fax -
         Email - richardhurn@ispwest.com

5.   The term of the Agreement is one year.

- - - -
The Parties signify their agreement to the Non-disclosure Agreement and this
Appendix 1 thereto by affixing the names of their duly authorized
representatives where indicated below:

NEW VISUAL CORPORATION

By:      /s/ Brad Ketch                   By:      /s/ Richard B. Hurn
------------------------------            ------------------------------------
Its:     President & CEO                  Its (title of person who will sign)
                                                   Consultant
                                              -------------------------------